Thursday, July 21, 2011

A hidden cost of health insurance "efficiency"

As regular readers know, I take a dim view of those who tout efficiency because they use it as a code for lower obvious costs.  They ignore that lowering costs may reduce effectiveness or may increase costs elsewhere.

A recent case was that someone thought that Medicare Advantage participants getting health club memberships was a cost that could be eliminated.  I'm sorry that I didn't note where I read it.

However, a health club membership can cut costs elsewhere.  Granted that not everyone who has such membership gets any real gain.  Some show up for the sauna or the hot tub and get no real exercise.  Probably sufficient numbers show up and do exercises that increase bone mass, muscle tone, and cardio-vascular function so that they will be less likely to be hospitalized than those who don't show up.  In other words, the cost of the health club membership can offset the costs of major medical intervention.